By Don Kavanagh | Posted Friday, 07-Jun-2019
The soaring prices of the world’s top wines will be no news to anyone who hasn’t spent the last five years living under a rock, but you might have missed the relentless upward creep of all the other wines too, especially in the United States.
The US wine market’s rude health has seen a greater increase in average wine prices than any other major market across the past six years, some distance ahead of Europe, the UK, Hong Kong and even the broader global average. And while the US is the standout performer in this respect, all major markets have seen hefty price rises.
That figure is a global average across all markets going back 20 years, so it is kept that low by both low-priced wines and historically lower prices generally during the early years of the century. That has changed, however, and it is inflation in the US market that appears to be driving the relentless increases in the average of a bottle of wine, as hefty price hikes and the sheer volume of sales sway our global figures.Looking at the wine industry in the broadest possible terms means offsetting the likes of DRC’s Romanée-Conti Grand Cru or Leroy Musigny – the world’s most expensive wines – with supermarket brands destined to be consumed within half an hour of purchase. Trawling through Wine-Searcher’s database gives a kind of wine benchmark, an average of average prices, covering both ends of the spectrum, that currently stands at $51, as we discovered when we announced our Moët Index last month.
At the end of May 2014, the global average price for a bottle of wine was $35.50; this would rise to $36.80 by 2015 and $39 by the following year. 2017 saw a sharp rise, to $44.50, and that had risen to $48.50 by last May. It currently stands at $59.30, an increase of 60 percent.
Inflation in the US was 8 percent over the period 2014 to today, according to the US Bureau of Labor Statistics, meaning a bottle bought at the average price in May 2014 – $34.25 – should cost $36.72 today. Instead, the average retail price for a bottle of wine in the US market as at the end of May 2019 is $73.50, more than double what it cost six years ago. Most of that increase happened since last year; in 2015 the price had risen to $40.60, followed by steady rises each year until it hit $53.30 in 2018. Since then it has jumped by more than $20 a bottle.
Other markets have also seen steep rises, but not in the same range as US prices. The UK had a 2014 average price of $64.75. That rose to $69.80 in 2015, $73.60 in 2016 and 2017, and then a stunning leap to $90.10 last year. The UK average price currently stands at $113, a rise of 57 percent over the past six years.
The European average price has been rather more restrained, reflecting the generally lower rates of tax on wine in mainland Europe. In 2014, the average price was $41.90, falling to $40.60 in 2015. The following year saw healthy growth to $44.40, followed by a jump to $47 in 2017. Since then, it has risen to $54.60 last year and it currently sits at $59.65, a 70 percent price hike over the six years.
Average prices in Hong Kong have been even more spectacular at first look, mostly because they started at a higher level. In 2014 the figure stood at $97.75 and then shot up to $114.25 the following year. A small rise in 2016 saw it hit $116.80, before shooting up to $128.20. Another sharp rise in 2018 saw it reach $141 and it currently stands at $165, by far the most expensive of the main markets.
Australia, by contrast, has seen a relatively calm line of progress, even featuring a small decrease last year. In 2014, the average price for wines listed on Wine-Searcher in the Australian market was $43. The market then saw a series of quite large increases (to $47 in 2015, $53.30 in 2016, and $69.80 in 2017) before peaking at $77.50 last year. The average price is currently $71.10, for a 60 percent rise in six years.
We are about to launch into our annual round-up of the world’s most expensive wines, so we will look at wine-producing regions and grape varieties in more depth over the coming weeks, but a look at the big picture shows one incontrovertible truth about wine prices: the only way is up.